Failed property tax bill won’t deter GCU

Grand Canyon University President Brian Mueller said Wednesday that a failed property tax bill in the Arizona Legislature will not deter the school from continuing to invest in its west Phoenix campus or halt its many contributions to the community.

“We want to be an integral part of the economic development of the city of Phoenix and especially west Phoenix, but we understand if the Legislature does not want to support the bill at this time,” Mueller said. “The University will honor that decision and continue to do everything it can to provide high-quality, low-cost education to students and continue to invest and be an economic stimulus to the city of Phoenix and the state of Arizona.”

In addition to the hundreds of millions it has invested on its campus, GCU has become heavily involved with the city on public-private partnerships.

In 2012, the University entered into a $1 million partnership with the Phoenix Police Department to reduce crime in the neighborhoods surrounding its campus.

Last year, Grand Canyon launched a groundbreaking, free tutoring program for students at Alhambra, Maryvale, Bourgade Catholic and Faith Christian high schools designed to raise the academics of underperforming students while introducing them to college peers who serve as mentors.

This year, GCU helped the city overcome a $38 million budget shortfall by pledging $125,000 to fund two programs in danger of being eliminated – a drowning prevention initiative and graffiti abatement efforts.

GCU’s west Phoenix campus (Photo by Darryl Webb)

The school also is involved in more than 120 community projects through charitable donations and volunteer efforts from its students and staff. Mueller said those kinds of commitments will continue.

“That’s who we are,” Mueller said. “Our students and staff have a long history of being socially responsible, compassionate servant leaders by connecting with their community.

“We are committed to continuing those efforts, being good partners with our neighbors and spearheading the revitalization of the community in which we live.”

The property tax bill (Senate Bill 1303) would have reduced the school’s property tax assessment ratio from 18.5 to 5 percent. However, the total amount the University pays in the future – even at the reduced rate – would continue to increase because of all the investment it already has made, and will continue to make, in infrastructure on its Phoenix campus. GCU’s property value will increase significantly in 2014 because four new buildings have been constructed and three more will be completed by September.

Since 2009, Grand Canyon has reinvested 150 percent of its after-tax profits back into the University with state-of-the-art classrooms, laboratories, residence halls, a library, Student Union building and other facilities. It has plans to invest hundreds of millions more in the next four years on its Phoenix campus and a new campus in east Mesa that is set to open in 2015.

Opponents of the bill, including Ed Ableser, D-Tempe, claimed SB1303 would raise property taxes for others. On the contrary, homeowners in GCU’s neighborhood actually saw a decrease in their property taxes in 2013 after the school’s property taxes increased by 400 percent (from $300,000 in 2012 to $1.2 million in 2013). GCU was willing to include language in the bill that guaranteed it never would pay less in property taxes than it paid in 2013, assuring there would be no shift in the tax burden to local homeowners.

“We don’t believe the merits of the bill were fully understood, especially as it relates to its effects on homeowners,” Mueller said. “It was never our intention to shift that burden, and we are more than happy to pay our fair share in property taxes.”

In addition to the property taxes, GCU estimates it will pay $4.6 million in construction sales taxes this year for projects already under way, and that could increase to more than $40 million in construction sales taxes over the next four years on its Phoenix and Mesa campuses.

State universities and other nonprofit schools do not pay property taxes, nor do they pay state or federal income taxes.

Sen. Steve Yarbrough, R-Chandler, sponsored the bill because he said it encourages GCU to continue to invest in an area of town that is often overlooked when it comes to economic development. A day before the property tax bill was defeated, Gov. Jan Brewer signed a $5 million tax credit for an Apple manufacturing plant in the East Valley.

Regarding the story about the property tax bill in the Arizona Legislature, I’m sorry this is happening to the school. Politics always get in the way. I have always been an advocate of a flat tax. All persons should pay a percentage tax based on their income earned. I believe that as an American Citizen it is my civic responsibility to ensure my neighborhood and community are safe and sound. GCU should not be harassed or exempted because it is a business entity. The shareholders/owners of the school should pay their fair share of FLAT taxes based on what they earned from the school. As should the people in the community; no matter what they earn in West Phoenix. Get rid of the IRS and introduce a flat tax system that pays the community/city first, then the county, then the state and finally the federal level. I wish GCU all the best of luck in trying to continue to spearhead progress in their communities and I am proud to be a student attending. Have a great day. Sterling

Apr.18.2014 at 7:55 am

Dametrice Brown

The State Legislature needs to rethink it’s decision. If this university has invested in cleaning up the communities around it and increasing the educational aptitude of the high school students it only makes the state look better and boast nicer numbers! The university is helping to increase the value of the community and increasing jobs and lower crime. Why bite the hand that feeds so many people and show contraction all in the same week??? Maybe the school needs to come together and provide MORE fact sheets and testimonials as to how helping it helps AZ.

Apr.22.2014 at 6:35 am

Patsy Baker

Grand Canyon University has made a great impact on this area of Phoenix. They should get a tax break just as well as companies like Apple and others that don’t give as much back to the community. This whole thing “smacks” of ASU leadership trying to keep GCU from going forth with all their projects.